mm015: Welcomed back to the guild

While the webtronic world I spend much time in swoops along, I can’t help but touch base in the real world occasionally — okay, every day. Today, for example, for the first time perhaps ever in a passenger car, I paid $54 to fill up my tank with 87 octane. Ouch.

I guess I’m kind of shocked and annoyed that gasoline prices climbing toward $4/gallon haven’t created much of an outcry as yet. Maybe I should start outcrying. And while the rest of the world is smirking knowingly, and the rest of the U.S. is breathing with relief that they don’t share my northern Illinois local conditions (summer blend regulations, a key nearby refinery off-line due to a March fire), I have to feel we’ve all not seen the worst. And why so little concern?

Have “they” softened us up, so we willingly put up with the prices? Oh, yes, I’m aware of that idiotic (a word you’ll learn that I don’t use lightly) so-called one-day boycott on May 15 — what a joke! How many of those boycotters parked their cars all day and took their bicycles or mass transit? I vote none! — and some senators had a photo op the other day, but really!

Okay, so you figure that, with prices nearing historic highs (this time, inflation adjusted) the oil companies would be doing all they could to increase production to fill that demand at such profitable selling prices. You figure wrong. A story in the soon to be last week’s Business Week points out the error. Think Exxon Mobil is spending its cash, rolling in historic, capitalistically orgasmic waves, on new explorations, improved wells in mature areas, new refineries? Not at all. This titan of industrial might is spending huge wads of cash buying up its own stock. This has the paper effect of increasing the value of the remaining shares, and fully meets Exxon Mobil’s main obligation to increase shareholder value.

So, we’re back to yesterday’s theme: shareholders are probably the least important of a corporation’s stakeholders, especially the short term traders for whom these 90-day performance figures are so critical. But they’re the ones Exxon has bent over to serve, at everyone’s expense. So their conservative investment strategy becomes a self-fulfilling prophesy: fuel usage will indubitably go down in the long term due to high prices, so why invest in fuel? Of course this lack of investment leads to higher prices, ad infinitum.

Don’t get me started on ethanol — a farm-state ass-kissing boondoggle if ever there was one. It takes more energy to create ethanol from corn in this country than ethanol itself yields — your government at work, and every darned one of our potential presidents dutifully bows and scrapes in Iowa despite that fact. The cheapest ethanol in the world comes from the third world, such as Brazil where sugar cane is converted efficiently. And the farmer protecting politicians keep the tariffs on third-world ethanol unaffordably high. 300 million citizens held hostage to a couple of million farmers — how is that right?